Safety Controls & Devices Limited

Industrials — Engineering & Construction · BSE

₹74.00+₹5.67 (+8.30%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:02 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Safety Controls & Devices Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Safety Controls & Devices Limited engaged in the engineering, procurement, and construction business in India. The company engages in the installation of substations, construction of solar plants, and installation of firefighting equipment.

IndustryEngineering & Construction

SectorIndustrials

Employees73

Annual revenue₹103 Cr

How does it make money?

Turns over ₹103 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 73 employees supports ₹1.40 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin15.8%

Net margin8.8%

Revenue / employee₹1.40 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?Some evidence

ROCE of 33.0% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE33.0%

ROE29.0%

Peer median ROE14.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 2 years revenue moved +114% while net margin moved +874% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+114%

Margin effect+874%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.7x

Sector Median

30.1x

median of 3 sector peers

🟢Against its sector it trades 48% below the peer median of 30.1x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

30.1x median of 3 peers · -48%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

15.7x

P/B

1.74x

EV/EBITDA

11.1x

PEG

0.04

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 4.8% to 15.8% over 2 years.
Return on equity is rising
ROE has improved from 3.5% to 21.3%.
Return on capital is rising
ROCE has improved from 14.0% to 33.0%.
High return on capital employed
ROCE of 33.0% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention3

Debt is rising
Total debt is up 83% over 2 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 158% against revenue growth of 114% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 83% over 2 years, from ₹19 Cr to ₹34 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Inventory building faster than salesFinancial
Inventory up 158% against revenue up 114% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 33.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 4.8% to 15.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 48% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 35% a year✓ 46.4% CAGR
Latest reported year was 129.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 15.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹12 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 4.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

10 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹147 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.7x

Fair

Fairly valued against the generic band

P/B Ratio

1.74x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.72

Profitable

Profitable on a per-share basis

ROE

29.0%

Strong

Strong capital efficiency

ROCE

33.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.70x

Moderate

Moderate leverage

Revenue Growth (YoY)

129.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

124.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹23 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹74

ROA

10.3%

Good

Assets are working hard

Operating Margin

11.9%

Average

Average margins

Net Margin

12.3%

Good

Strong bottom-line conversion

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

70.7 / 68.0

Bullish alignment (short > long)

RSI (14)

62.0

Neutral momentum

Financial Trend (3-Year)

Metric	FY23	FY24	FY25	2Y CAGR
Revenue	₹48 Cr	₹45 Cr	₹103 Cr	+46.4%
EBITDA	₹2 Cr	₹8 Cr	₹16 Cr	+166.8%
EBITDA Margin	4.8%	18.1%	15.8%	—
PAT (Net Profit)	₹0 Cr	₹4 Cr	₹9 Cr	+356.8%
EPS	₹0.22	₹2.02	—	—
ROE	3.5%	22.9%	21.3%	—
ROCE	14.0%	31.4%	33.0%	—
Total Debt	₹19 Cr	₹30 Cr	₹34 Cr	+35.2%
Free Cash Flow	-₹13 Cr	-₹11 Cr	-₹12 Cr	—

🟢 Revenue has grown at 46.4% a year over 2 years.

🟢 EBITDA has grown at 166.8% a year over 2 years.

🟢 EBITDA Margin has risen from 4.8% to 15.8% over 2 years (+11.0 pts).

🟢 PAT (Net Profit) has grown at 356.8% a year over 2 years.

🟢 ROE has risen from 3.5% to 21.3% over 2 years (+17.9 pts).

🟢 ROCE has risen from 14.0% to 33.0% over 2 years (+19.0 pts).

🔴 Total Debt has grown at 35.2% a year over 2 years.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹120 Cr

Total Liabilities

₹78 Cr

Total Debt

₹34 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹7 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.3%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 mixed5 general

Safety Controls & Devices Ltd Share Price

Business Today, 16 Oct

Safety Controls IPO lists at ₹83 with 3.75% premium

HDFC Sky, 13 Apr

Safety Controls & Devices IPO Date, Price, GMP, Details

IndiaIPO, 07 Feb

Safety Controls & Devices completes virtual investor meet at Bharat Connect

scanx.trade, 30 Sept

Compare BRAHMAPUTRA INFRA. with

Equitymaster, 13 Oct

Safety Controls & Devices share price lists at ₹83, up 3.75% from SME IPO price in an otherwise weak market

Livemint, 13 AprPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟡Financial HealthAdequate9.8/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong12.9/15

🟡ValuationFair9.3/15

🔴RiskHigh2.5/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 35% a year46.4% CAGR
✓EBITDA margin holds above 14%15.8%
✗Debt / EBITDA stays below 2x2.1x
✗Free cash flow remains positive-₹12 Cr
✓Interest cover stays above 3x4.0x